Not very surprising. He had already been arrested, back in 2002, for selling illegal stuff on eBay. He was somewhat of an attacker of Bitcoin, promoting his "bcash" fork.
For reference, that "illegal stuff" were just fireworks (too powerful, I guess) [0]. Those "attacks" are fully explained in his recent book "Hijacking Bitcoin: The Hidden History of BTC" [1]. He didn't fork Bitcoin, he just proposed its name: Bitcoin Cash [2], which is not "bcash" [2][3].
Bitcoin has worked for me all right for 10+ years. What is exactly wrong with it? At times fees have been a bit higher, but overall I would see the protocol as "good enough". For smaller transactions I have been using Lightning Network and it seems to work all right. The fact that Bitcoin hasn't hard forked for whatever reasons is a positive feature, that outweighs the negatives.
You can consider for example Ethereum, which has hard forked numerous times and changed the monetary policy as well multiple times. It just feels quite centralized and controlled by Vitalik. Harder to trust that crap.
Vitalik is basically only a thought leader these days, he has taken many steps back (as you can read about on his blog). He doesn't "control" anything.
The guiding principle for the monetary policy of Ethereum has not changed: minimum viable issuance. Thanks to the economic efficiency of PoS + fee burn, it enabled what amounts to frontrunning every "halving" and having ~net zero issuance, it's simply good for holders.
If Bitcoin had a way to be secure without further issuance (huge can of worms, halvings are slowly ticking time bombs in the long-run, unless fees rise significantly), it'd be good for holders to fork and scrap it too. There'd be no need to pay billions for security through issuance.
Calling Ethereum centralized at this point is ridiculous. The fact that core devs from multiple client teams can manage to agree on and implement forks to keep developing the protocol (unlike Bitcoin) is a major accomplishment, not a failure.
It is possible, but absurd. Why more layers if layer 1 works fine just increasing the maximum block size? Bitcoin Cash did it and works flawlessly. Just try it.
> Bitcoin cash pays the price through centralisation
What centralization? If you are referring to the node implementations, it has several [0]: Bitcoin Node, Bitcoin Unlimited, Bitcoin Verde,... Bitcoin BTC has basically one: Bitcoin Core [1]. If you mean mining, it's the same as BTC, same mining algorithm, same miners.
> It can still only manage 100 transactions/second
True for now, but it's way more than it needs right now now [2]. But don't worry, this month upgrades to ABLA [3], and will be able to scale to as many tx/s as needed.
The increased block size increases the amount of storage required to run a full node (and also the bandwidth required to sync nodes). Even at just 100 tx/sec, you need 14x the storage of a bitcoin node (so around 10TB vs 700GB for bitcoin). That puts it out of reach for many people to run and so making it more centralised.
To compete with a payment rails like Visa and Mastercard, you'd need to increase that to 10000+ tx/sec, making running a node complete unfeasible for most people to run.
There's simply no such thing as a decentralised blockchain network with unlimited block-size. At some point if you want to remain decentralised, you have to create layer 2+ networks that can handle the smaller, high-bandwidth transactions, and so you may as well commit to that model now and focus on making the base layer as robust as possible.
Ultimately for a money to attract the most value, it needs to optimise for the very largest transactions, and offer the most robustness (i.e. most decentralisation). This is precisely what bitcoin has done.
If you mean a full non-mining nodes (which only a few people really need, merchants, exchanges, ...), read points 7 and 8 of the whitepaper. For full mining nodes, you need expensive specialized hardware anyway.
Non-mining nodes are just observers that do nothing good to the network. Is like going to war with popcorn as a weapon. Mining nodes are the only ones than can include transactions to a block.
Yes full non-mining nodes. I understand about pruned nodes, but that is a bonus for both networks - it means people can run a node on their mobile phone for example. The nodes have the real power in the network - they're are the people’s vote on what bitcoin really is. You can mine what you like but if my node says it's not bitcoin, it's not bitcoin. And there's many more who think like me. This has already been proven in the block-size wars - both the consensus on block-size and proof of the power of nodes vs miners.
The HW to run bitcoin is extremely cheap - less than $100. All you need is an old laptop or Raspberry Pi with a 700GB of storage, and a ham radio/dial-up internet connection to another node.
Yes. It's network effect. Even if all of the miners simultaneously decided to go big block or some other controversial change that most people don't want, the majority of the population's nodes would then not accept the mined blocks. They'd see the rate of new blocks drop to 0, and people would instantly start mining on their PCs to get the block reward. Some of the miners would start to change their mind and start mining with ASICs for the easy block-reward and eventually the hash-rate would build back up again, with the previous miners or without them.
The non-mining nodes in fact can completely destroy the ASIC miners by upgrading to a new POW algorithm. Hopefully it will never come to that, but ultimately the people, with their non-mining nodes have the power, not the miners. The only way miners can successfully change bitcoin is if the vast majority of people agree with the change.
The comments to that article (especially the one from dooglus) make a decent rebuttal to the idea that full nodes are a "terrible idea".
If you're convinced a block chain can scale to 50k transactions / sec and also remain decentralised and offer enough privacy, then keep at it, but I'm afraid I'm unconvinced.
Even if it were theoretically possible, the solution would likely be so complex, or based on a long chain of "hopefully unlikely" events that I wouldn't have enough confidence in it to store large amounts of value.
The slowness and simplicity of the Bitcoin network is what gives it robustness, and if I'm storing large amounts of money, that's what I want even if it means I can't buy a cup of coffee on the same network.
> The slowness and simplicity of the Bitcoin network is what gives it robustness, and if I'm storing large amounts of money, that's what I want even if it means I can't buy a cup of coffee on the same network.
Then why not just use gold? It is slow, simple, and you can't use it to buy coffee.
Because it's not as liquid, it's not as easily verified, the supply doubles every 40 years, it's not as easily protected (compared to multi-sig bitcoin), I can't send it around the world in 10 minutes, and I can't take it across borders in my head. It doesn't form the basis for the entire world's future reserve asset and monetary unit, and the market is mature/saturated whereas bitcoin is completely misunderstood by almost everyone and so is wildly undervalued.
You are describing Bitcoin Cash too, with the difference that with BCH in that 10-minute window the transaction is irreversible (like the original Bitcoin), so a 0-conf tx. And extremely low fees, of course (also like the original Bitcoin).
Bitcoin transactions are also "irreversible" providing the fee paid is reasonable, but ultimately the clearing time for both networks is down to the likelihood of a 51% attack for which bitcoin is far more protected against due to the far larger amount of hash power. It's not comparable.
If I'm moving/storing $1 billion, do I care if the transaction costs $1 instead of $20? No - I care that I'm storing the money in the safest place to store value I can find.
> I think it has worked well for a lot of people as an investment. Not so much as a replacement to normal money.
Replacing normal money altogether would anyway be an huge goal. Personally I believe, long-term Bitcoin is getting there. I've been using it for payments, now and then, for about 10 years. Mostly as an experiment, but sometimes it also is more convenient to pay with BTC. In general there has been slow, but increasing acceptance of BTC as a payment method. For some things it makes more sense than others. The biggest issue was the early misconception of it being good for microtransactions. I would say that it is more for macropayments.
Bitcoin was designed as an investment vehicle by its choice of capped supply.
Use as a currency would have vastly benefitted from a fixed block subsidy, which also would have avoided much of its current wealth concentration [1].
Use as currency is possible with Layer 2 systems like Lightning. The issues I believe are both technological, political and philosophical: apart from the ease of use (or lack thereof), people prefer the currency they need to pay taxes with, and will always prefer the depreciating one, until it stops having any useful value. See the arguments put forth by Saifedean Ammous in his book.
For me the main ledger is equivalent to inter-bank settlement payments. It is not for people to use directly, it is to settle the large amount between "market makers", so $10+ transaction fees are not a problem when the amounts transferred would be in the millions. These settlements are few and far between, they do not require immediate execution. In Bitcoin parlance, these market makers would be Lightning nodes, which I imagine in the long run would not be operated by your Average Joe.
Bitcoin (BTC) worked perfectly as currency in the beginning, until Blockstream took over the development team, and they decided to keep the temporary anti-spam 1MB block limit, making 0-confirmation transactions (instant payments) very risky by implementing return-by-fee (which make transactions reversible before getting confirmed), etc.
Miners mine whatever is most profitable for them, regardless of how good or bad is that cryptocurrency, and they switch between BTC, BCH or any other SHA256 (not Bitcoin Gold, which uses a different hash function) even many times in a given day.
Fixed block subsidy would have a risk of supply outpacing the demand. Then the price would drop structurally which could cause "run on bank" and wholesale abandonment.
Decreasing amount of bitcoin supply means that eventually the supply would fall below demand, which ensures rising price.
Every 4 years when supply and the demand reach equilibrium, the supply is halved which triggers new price rise and renewed interest. The entire crypto ecosystem follows.
Bitcoin halvings are THE reason crypto is a thing. Not just a curiosity for some techies.
We have maybe two cycles left ahead of us. Then crypto will become just digital gold randomly fluctuating with interest from the asset holders.
Given the monetary policy Satoshi chose and the headline he picked to include in the genesis block, I really don't think you can infer what he himself thought bitcoin was meant to become, even if he referred to it as cash originally.
Beyond that I don't see how it matters what something was designed to do or what early adopters personally used it for or thought it was meant to be used for. The only relevance for a technology is what it's actually adopted for over time and the total addressable market cap for a store of value being 100x + of that of a medium of exchange, it makes perfect sense to me that that's the feature the market converged to by far as reflected amongst other things by the relative prices between current btc and bch...
Satoshi wrote extensively about what he imagined Bitcoin could become, including in emails to me that I later published. Certainly, what was done to the original Bitcoin completely voided Satoshi's goals and offers an abject lesson in the difficulty of keeping institutions on-track over time.
Note that the same tactics that were used to wreck Bitcoin are now being deployed against Nix, as the open source community has struggled to learn the right lessons from Bitcoin.
> it makes perfect sense to me that that's the feature the market converged to
The market certainly didn't converge to that outcome. It was the result of relentless political scheming and psychological manipulation of a small number of people, combined with criminal tactics like DDoS attacks. The winners of that fight have then tried to retcon what happened as some sort of natural or obvious outcome, but then why did it require so much viciousness and illegal behaviour?
The market value of all cryptocurrencies seems to move in tandem, or at least did many years ago when I last cared about this topic. It reflects nothing more than the general hype and brand awareness around Bitcoin and crypto. Certainly a "store of value" that can't directly be used to purchase things is worthless, as any government that wishes to void that store of value and force users back into their own currencies can do so overnight by simple legal fiat.
I haven't personally done a deep dive on Satoshi's intentions probably for the specific reason I've always failed to see why former intentions or aspirations for technologies, even by their own creators would have any relevance towards their future use cases. If Edison had said light bulbs were for heating should we then oppose them being mostly adopted and optimized for lighting?
As a very passive but very interested stakeholder at the time of the block size wars it really felt to me there was heavy politicking and various degrees of !@#$ going on from all sides. The amount of viciousness certainly didn't surprise me given the immense magnitude of the stakes involved with potentially replacing a market in the hundreds of trillions of dollars.
I'm not sure I follow your last point. Stores of value certainly don't have to be mediums of exchange to build market cap (whereas the converse is true). That's true of the great majority of monetary wealth in the world. Most of fiat currency is held in treasury bond form (not a medium of exchange), real estate is heavily monetized and stocks to a degree. The actual dominant medium of exchange today is cash mostly in bank deposit form and it's a tiny fraction of that market which mostly sits on longer term horizons in assets that perform the function of storing value better. Are you saying a government might void converting stores of value to mediums of exchange? Or cryptocurrency specifically? In essence that they would make those assets illegal altogether? If they did it's true they would become worthless, at least for that jurisdiction, but some of the market obviously disagrees with that assumption, and landmark events like the bitcoin etfs continue to point the other way.
> Around that time, Ver allegedly took possession of those bitcoins and in November 2017 sold tens of thousands of them on cryptocurrency exchanges for approximately $240 million in cash.
> Even though Ver was not then a U.S. citizen, he was still legally required to report to the IRS and pay tax on certain distributions such as dividends from MemoryDealers and Agilestar, which were U.S. corporations.
> In total, Ver is alleged to have caused a loss to the IRS of at least $48 million.
Lesson: You can’t run away from Uncle Sam even after signing away your citizenship.
I'm not a tax expert so wondering, shouldn't the potential loss be computed off the non payment of exit tax at date of exit or 2014 levels? (which would have computed to much lower than 48mm)
The article says it's mainly 2 things: under-reporting on the exit tax, but also not reporting the dividend more recently (2017) when he transferred the coins to himself from the companies.
Very interesting that he got arrested in Spain for tax fraud, just like John McAfee.
Things look quite bad for him, he went all in on Bitcoin Cash, and even used leverage. He defaulted on CoinFLEX and owes them $47M in USDC.
Roger Ver went from owning 131,000 Bitcoins in 2014 (worth almost 8 billion USD as of today) to pretty much broke.
More and more countries are implementing an "exit tax" when wealthy people try to give up their citizenship. Also, the US authorities make it increasingly hard to do so. I wouldn't recommend anyone to become a US citizen. Once you are in, it is very costly to get out again.
Even Germany which is an EU member has an exit tax when moving to another EU country. This is theoretically against the EU's principle of free movement of capital. According to EU law, any restrictions on the movement of capital or payments—either within the EU or between EU and non-EU countries—are generally prohibited. However, somehow Germany gets away with it.
It's not only Germany but also Austria and France (until 2004?). The Germany Wegzugsbesteuerung is meant to prevent cases where Germans leave the country for more than seven (or twelve upon request) years, e.g. to Switzerland, sell their Germany company stock and profit from paying a much lower tax or none like in Switzerland. Steuerflucht, tax evasion is prevented with this and there are certainly many who'd other move abroad, sell without taxation and move back again. There a plenty of exceptions though with countries Germany has a Doppelbesteuerungsabkommen (double taxation treaty) with to prevent cases where the individual would have to pay taxes in both countries.
Personally I never heard of this tax before, despite being a German living in Austria, but then: The tax targets wealthy individuals with company holdings trying to evade taxation.
https://de.wikipedia.org/wiki/Wegzugsbesteuerung
It is a bit different though, because the German exit tax applies to companies and people holding more than a 1% share in a company. So no exit tax if you hold bitcoins as part of your private assets...
Agreed that there is some tension with EU principles, but it is difficult to get it right. Building a company in country A for 20 years, then moving to country B for 184 days to sell it completely without paying taxes also does not seem like a fair system.
This applied to a friend of mine who held copyright on music. Apparently this is non transferable in Germany and it was worth quite a lot. He had to pay a significant amount to move to another EU country.
Social services in the US include Social Security, Medicare and Medicaid. (Note the capital letters. Those are the names of the agencies.) And yes, they all cover citizens living in and outside the United States.
The US government makes employers (corporations) pay a large amount of money into the private health insurance system (Required by law per employee. That sounds socialized, doesn't it?). They do that to reduce the tax burden on the poor, and to maintain healthy competition in the insurance market, for better or for worse.
In my opinion, that means doctors make more money because insurance companies put the burden of paying them on big corporations that can afford to do so.
Essentially, it means the poor get healthcare, the rich pay for it, and small business owners can expense it as a reduction in tax liability.
What do you suppose you'd do if you were an employer (a corporation) with global media reach who didn't want the government to force you to pay for your workers' health care?
Well, I think you'd invest a lot into propaganda teaching people that rich corporations shouldn't pay it, the government (aka poor taxpayers) should pay for it.
And that's why so many people are under the same impression that you have (or had).
This is not accurate. If you move out of the Netherlands as a Dutch citizen you definitely still have to file your IRS for at least a couple of years (until "computer says no"). Even with no assets or income from Netherlands.
Source: I did it.
And of course if you have assets in The Netherlands of any kind you'll have to keep filing IRS as long as you have anything going on there.
US is likely the only jurisdiction that can actually enforce it. Other countries can't just call US government to send them back if they suspect they owe some tax.
Some foreign banks simply don't _want_ to deal with American citizens, precisely because of the reporting requirements strong-armed in agreements with the US -- because they have to report those bank accounts back to the states every year (or quarter).
It's not like the US is funding that foreign work to be done on their behalf, either. So the reticence to even bother with creating bank accounts for American citizens makes sense.
Many billionaires who move to USA, UK, Canada and Australia are corrupt/oligarchs/tax Dodgers. They are ok even to loose 50% of their wealth to get protection
It’s a normal thing for the DOJ. They write press releases like articles, so you’ll see titles like “Popular businessman,” “Tech Company Founder charged with fraud,” “Social Media Influencer charged with…” etc.
Yes. Trials are adversarial- persuasion often matters as much or more than facts in formal legal writing. Blog posts presenting reason for prosecuting someone even moreso... Public perception, politics, etc etc etc.
Look, if you owe lots of tax its because you made lots of money. Pay the tax, be happy.
I just don't get why some people are so obsessed with not paying tax.
You don't have to pay tax when you didn't earn money so stop being so stingy.
I know lots of people who go to extraordinary lengths to reduce the amount of tax they will pay even if it means they end up with less money in their pocket. It's crazy. Needing to pay tax seem to make some people go nuts.
I know one person who would rather make half the salary because it means less is paid in tax. I just roll my eyes.
Just pay it. It pays for defence, education, health, government services and a bajillion other things.
Theres a huge difference between legally optimizing your tax burden and committing tax fraud. If you want to give more money than is legally required to the federal government so they can light it on fire I guess that’s your prerogative…
I hate taxes because US tax code is pretty slanted against income earners. It just doesn't feel great to take home proportionally less and less as you work harder. We don't treat corporations or capital holders the same way, and that makes me bitter.
100% agree. Taking a paycheck is the worst way to make money in America. That said, it makes me even more sympathetic to the post you replied to. Basically no one working a 9-5 is making enough to owe the IRS $48 million, including this guy. If you make $240 million, pay your damn tax and be happy.
Not paying taxes is the single best thing anyone can do. You can get an average market return and you will still move up, relatively, because most people pay taxes. Often it's the difference between having to work or not.
Old money doesn't pay taxes through international arrangements. It's only for the working and lower middle class. Gifts from foreign people, companies and trusts are completely tax free in America for example. It's not talked about unlike bullshit minimum taxes on new money because same people controlling the media use it.
Income tax is primarily designed to keep elites in power and to prevent social mobility, they don't have to do anything special, not paying taxes over decades is an incredible advantage. If you start poor the only realistic option is to risk evasion until you make enough to start not paying legally, and the limitations period on tax evasion runs out.
It's challenging when dealing with millions of dollars. $5 million is a substantial amount, and a 37% capital gains tax would reduce it to approximately $3 million. Essentially, you would lose $2 million to taxes.
$5m is life changing.
Having said that it is stupid to commit tax fraud and live a life of perpetual fear.
This is where people lose perspective. You're not "losing" anything. If $2million is owing on $5million then the $2million was never yours to "lose to tax". The $2million was always owned by the government (assuming it is calculated correctly).
The mindset that tax is losing money or being taken from you is I think at the heart of why some people go tax crazy.
It's easier to deal with if you don't ever see it as your money, cause its not your money.
You made $3million and part of the cost of making $3million is $2million tax.
Focus on the $3million. The $2million in a real way does not exist to you.
Like many things in life this makes sense when you understand that a large number of people fundamentally believe the world is a zero-sum game. They can only feel like they've won it someone else loses.
Fun fact: Gregory Maxwell (aka nullc) has been on the forefront of the character assassination of Roger, and he can't let this opportunity to take a stab go to waste.
For some insight into the mind of nullc, see his abusive Wikipedia behavior[0].
Since apparently some lame edit war on Wikipedia I got into 18 years ago that lasted all of about a day and was shortly forgotten by all is of such apparent interest, perhaps you'd be interested in sharing exactly what you were up to 18 years ago?
In any case, I fail to see how pointing out the he is a government representative-- according to twitter-- is in any way a character assassination.
